Global spending on wind energy is projected to hit $810billion in a decade, a new report by Rystad Energy estimates.
This signifies a shift to a renewable energy resource that Nigeria can attract investments into with the right policies.
In Nigeria, there are great prospects for wind energy utilization from offshore areas like Lagos through Ondo, Delta, Rivers, Bayelsa and Akwa Ibom States to the mountainous terrains of the middle belt and northern fringes which have demonstrated high potential for great wind energy harvest.
Despite the huge potential, wind energy development in Nigerian is still at an infant stage while the few wind energy technologies found in the country are mainly windmills which are used for irrigation water pumping in some rural communities in the northern regions.
There is an opportunity for Nigeria. Rystad Energy estimates that total expenditure in wind energy will hit $810 billion within a decade. This will amount to $56 billion in 2021 as almost 13 GW of capacity is expected to be commissioned, lifting the cumulative global installed capacity to 46 GW.
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“The colossal level of investments anticipated in the offshore wind industry this decade reflects the ambitious targets set by companies and governments alike. As the market matures and economies of scale are achieved, investments could surge further, sparking even more installed capacity,” Petra Manuel, an offshore wind analyst at Rystad Energy said.
Yearly spending will rise to $126 billion by 2030. This will be after a short-lived dip in 2022 and 2023, according to the Norwegian independent energy research firm. Capital expenditure today accounts for 95percent of the total expenditure, with operating expenditure representing 5percent.
Rystad Energy noted that capex share is expected to decline to about 80percent by 2030, as all the new installed capacity will require more operational spending to run and maintain.
According to the consultant, 2030 will be the year of the inflection point when offshore wind capex will be on par with offshore oil and gas greenfield capex (excluding exploration work), at about $100 billion.
Europe, the most mature market, is still expected to dominate offshore wind spending this decade, totaling about $300 billion.
Some of the assets with the largest expenditures are located off the UK, including Ørsted’s 4.8-GW Hornsea Two, Three and Four projects, which are lined up for more than $14 billion in capex.
The Dogger Bank project, to be developed in three 1.2 GW phases by SSE, could see more than $11 billion in capex, while Scottish Power Renewable’s 3-GW East Anglia Hub will likely involve capex of more than $8 billion.
China dominated annual spending between 2019 and 2021 due to its substantial annual capacity additions.
This decade, the country is forecast to spend about $110 billion. Outside of China, Asia is expected to see significant investments this year, driven by Vietnam and Taiwan. Spending in South Korea and Japan will also increase beginning in 2023 as more projects are lined up.
Rystad Energy expects North and South America will only start spending substantial amounts on offshore wind in 2023.
The first large-scale project in the US will be the 800-MW Vineyard Wind 1 scheme developed by Avangrid and the Copenhagen Infrastructure consortium off the coast of Massachusetts, with an estimated investment of $2.8 billion.
